How to use the Notice Period Buyout Calculator
- 1. Enter your policyWhether buyout is on basic or gross, the monthly amount and the notice period.
- 2. Add your planDays you can serve, leave to set off, and how the per-day rate is worked out.
- 3. CalculateSee the buyout, the reimbursement, the tax on it and your net cost.
How a buyout is calculated
When you can't serve your full notice period, many employers let you pay for the days you don't serve, called a notice buyout. The amount is the shortfall in days times a per-day rate. Policies differ on three points: whether the rate is based on basic or gross salary, whether a month counts as 30 days, 26 working days or the actual days, and whether earned leave can be set off against notice. Your appointment letter or HR policy decides each one.
Many new employers reimburse part or all of the buyout, often as a joining bonus. That reimbursement is taxable income, so the calculator deducts tax at your slab rate plus 4% cess to give your real cost. Companies usually recover the buyout from your full and final settlement rather than asking for a separate payment.
Worked example
With a 90-day notice period, buyout on a basic of ₹45,000 a month, 30 days served and 10 days of leave set off, 50 days remain. At ₹45,000 ÷ 30 = ₹1,500 a day the buyout is ₹75,000. If the new employer reimburses 50% (₹37,500) and you're in the 20% slab, tax on that is ₹7,800, so your net cost is ₹45,300.
Before you resign
- Ask HR for the exact buyout policy in writing.
- Get the new employer's reimbursement in your offer letter.
- Ask whether your manager can shorten the notice instead; it's sometimes waived.
Frequently asked questions
Can my employer refuse a buyout?
Some policies make it the company's choice. Read your appointment letter and discuss it early with your manager.
Is the buyout deducted from my taxable salary?
This is a debated point and practice varies, so check with a tax adviser; the calculator doesn't assume a deduction.
Is the notice buyout calculator free?
Yes. You can open the notice buyout calculator and fill in everything without signing up. When you calculate a buyout for the first time, we ask once for your name and WhatsApp number; after that it, and every other Uncodemy tool, opens straight away.